Benson Remanufacturing rebuilds spot welders for manufacturers. The following budgeted cost data for 2011 is available for Benson.
Time charges Material loading charges
- Technicians' wages and benefits $228,000 -
- Parts manager's salary and benefits - $42,500
- Office employee's salary and benefits 38,000 9,000
- Other overhead 15,200 24,000
Total budgeted costs 281,200 $75,500
The company desires a $35 profit margin per hour of labor and a 25% profit margin on parts. It has budgeted for 7,600 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2011 will be $400,000.
1. Compute the rate charged per hour of labor.
2.Compute the material loading percentage.
3. Sharrer Corporation has requested an estimate to rebuild its spot welder. Benson estimates that it would require 40 hours of labor and $2,500 of parts. Compute the total estimated bill. (Round answer to 2 decimal places, e.g. 10.50. Use the rounded amounts from the previous questions when calculating the answer for this question.)